GM Invests in Lyft: Digital Business Strategy and Platform Wars in the Supply Chain (Part 1) Pierre Mitchell - January 8, 2016 8:12 AM | Categories: Procurement Systems & Architecture, Supplier Collaboration, Supply Chain, Technology | Tags: GPTS, L1, Technology, Technology Disrupters GM announced earlier this week a $500 million investment in ridesharing company Lyft as part of a $1 billion fundraising round. Lyft now has a valuation of about $5 billion to $6 billion, while its main competitor, Uber, is at roughly $65 billion. Uber now has a market cap larger than GM or Ford. The partnership entails joint development of a network of autonomous GM vehicles that can be summoned via the Lyft mobile app. Lyft will also get access to a rental hub of GM vehicles so that Lyft drivers — while still needed, and that should be for a while — don’t even need to own a car. The drivers and passengers will also be able to integrate Lyft to OnStar services as the two firms work on joint development. This is a smart move for both firms, and especially for GM. While Tesla and Google may have the advantage in self-driving cars right now, GM — as well as Ford — is really trying to assert itself as a “mobile platform” and use Lyft as a strategic partner — customer, channel partner, supplier, development partner — rather than just let Apple and Google dictate the future of the dashboard with Apple CarPlay and Android Auto. GM and Ford both support these interfaces on some high-end models while also building out their own core platforms. In fact, Ford just announced that SYNC 3 and integration to these mobile platforms, via its AppLink integration platform, which lets mobile apps communicate with a driver via voice recognition, will be available for all future Ford models. Ford has also been quite active in trying to enlist other auto manufacturers to adopt an open source version of AppLink called SmartDeviceLink. Toyota has signed up, and other large manufacturers are evaluating it. GM’s move here has many lessons for procurement and supply chain organizations that we’ll discuss in future posts, but as an interesting side note, one of the providers linking into AppLink is Concur. Business travelers in their own GM cars or rented GM cars will be able to automatically download actual mileage into the Concur application. Concur has its own AppExchange platform, and it’ll be interesting how various platforms will begin to interact via open APIs rather than the just the current platform land grab going on right now. The Platform Awakens The “platform wars” are raging now across many areas as current and future technology titans are trying to establish dominant positions and de facto standards in areas, such as Internet of Things. (See here for a good recap of IoT happenings at the CES show.) In fact, speaking of platform integration, consider how an IoT device-connected world can now connect the car to the home. At CES, Ford did not release any update about any plans it has to partner with Google on its self-driving cars but did announce a partnership with Amazon to integrate to Amazon Echo with Ford’s SYNC/AppLink platform. But for procurement, the broader picture is that everything is becoming a service at all layers of the Everything as a Service (XaaS) world: SaaS — Software as a Service (aka cloud apps) PaaS — Platform as a Service (which can be focused on apps and/or integration) IaaS — Infrastructure as a Service (the underlying storage and computing resources) DaaS — Data as a Service (e.g., real-time supplier risk data subscriptions) BPaaS — Business Process as a Service (e.g., BPO firms, Managed Service Providers) So, why is this important to supply chain and procurement professionals? Most fundamentally, many large organizations are taking a hard look at their digital business strategies, which in turn require supply market intelligence to help formulate them, that then must be translated back to the supply chain and the suppliers needed to execute. Procurement and supply chain professionals simply won’t be relevant if they can't bring a basic understanding of these technology trends to the table to help either inform the strategy or to execute the strategy. Increasingly, innovation is becoming inextricably wedded to digital. So, supplier innovation to foster growth and product or service innovation will increasingly require supply management groups to understand the trends in digital innovation. Even at the most basic level, procurement needs to help the organization best commercially engage the massive ecosystem of providers in an XaaS world. Finally, supply management groups themselves are services businesses in their own right, and as they seek to aggressively expand their service portfolio to higher-impact value-creating services, but do it with minimal increase in resources and budget, they’re going to have to be very intelligent in how to harness the digital innovation happening for their own benefit — beyond just the usual approaches and tools. Spend Matters and ISM Tackle Technology Unfortunately, these capabilities aren’t very good right now, and procurement groups know it. Less than a third formally measure suppliers on innovation — or themselves on the supplier innovation they help tap for top line growth. The No. 2 and No. 4 technology-related interest areas cited by procurement groups in a recent poll that ISM and Spend Matters conducted were centered on disruptive technologies and digital platforms. And the No. 1 issue was how to get aligned with IT departments to help better manage technology in the supply chain. This is why we decided to work with ISM to create a conference specifically on these sets of issues. The Global Procurement Technology Conference, on March 14-16 in Baltimore, and will feature companies such as Amazon and IBM, which are very familiar with making supply chain and digital work together to create entirely new value propositions. Stay tuned for more on this series – and on the conference! Related ArticlesIs Amazon Business the Future of Procurement?Spend Matters 50/50: Uber for Business – A Provider to Watch in 2015Uber for Business: Features We’d Like to See Today (and Tomorrow) Uber and Business Travel: Hailing a New Era of Corporate T&E Discuss this: Cancel reply Your email address will not be published. Required fields are marked *Comment Name * Email * Website Notify me of follow-up comments by email. Notify me of new posts by email.